Elite Franchise Autumn 2013 by webwax

AUTUMN 2013

Stretching out

There’s no time to relax for YogaBellies

Ready, set, franchise

Is your business ripe for franchising?

Brand value

Pricing a franchise: the expert guide

Walk this way Subway’s Trevor Haynes has been at the centre of the sandwich giant’s path to franchising glory

(H)Cover.indd 1

01/10/2013 03:09

â&#x20AC;&#x153;Being your own boss is hard work but very gratifying. Having the opportunity to make your own decisions is very satisfying but knowing you can rely on the franchise group gives you the confidence to approach situations with ease and a shared experienceâ&#x20AC;? Kevin Old, Franchise Owner of Bournemouth

The Zip Yard Editorial & Ad.indd 1

30/09/2013 22:14

contents

AUTUMN 2013 SALES Adam Reynolds Account Manager adam.reynolds@cemedia.co.uk

In this issue

EDITORIAL Hannah Prevett – Editor hannah.prevett@cemedia.co.uk Josh Russell – Feature Writer josh.russell@cemedia.co.uk Adam Pescod – Feature Writer adam.pescod@cemedia.co.uk Helene Stokes – Chief Sub-editor helene.stokes@cemedia.co.uk

DESIGN/PRODUCTION Leona Connor – Designer leona.connor@cemedia.co.uk Dan Lecount Web Development Manager dan@cemedia.co.uk

Franchise fresh

CIRCULATION Malcolm Coleman Circulation Manager malcolm.coleman@cemedia.co.uk

Trevor Haynes reveals Subway’s franchise success secrets

ACCOUNTS Sally Stoker – Finance Manager sally.stoker@cemedia.co.uk Colin Munday Management Accountant colin.munday@cemedia.co.uk ADMINISTRATION Charlotte James – Administrator charlotte.james@cemedia.co.uk DIRECTOR Scott English Managing Director scott.english@cemedia.co.uk Circulation enquiries: CE Media Call: 01206 266 846 Elite Franchise is published quarterly by CE Media, Weston Business Centre, Hawkins Road, Colchester, Essex. CO2 8JX Copyright 2013. All rights reserved No part of Elite Franchise may be reproduced, stored in a retrieval system or transmitted in any form or by any means, without the prior written consent of the editor. Elite Franchise will make every effort to return picture material, but this is at the owner’s risk. Due to the nature of the printing process, images can be subject to a variation of up to 15 per cent, therefore CE Media Limited cannot be held responsible for such variation.

cemedia.co.uk

(H)Contents, News, Events.indd 1

Elite Franchise Experts

Pip Wilkins, head of operations for the British Franchise Association (bfa)

Bill Pegram, marketing director for The Franchising Centre

Euan Fraser, managing consultant at AMO Consulting

Sandra Venables, franchise consultant at Green Frog Consultancy

Suzie McCafferty, managing director of Platinum Wave

01/10/2013 03:26

13 6

Upcoming Events:

Are you ready? Turning your business into a franchise model is far from a no-brainer

The National Franchise Exhibition October 4 – 5 The NEC, Birmingham B40 1NT Lloyds TSB Free Franchise Seminar October 22 Hyatt Regency, 2 Bridge Street, Birmingham B1 2JZ

Franchising bears fruit for smes

The Franchise Conference and Supplier Showcase 2013 November 7 Warwick University, Gibbet Hill Road, Coventry CV4 7AL

The franchise option is more relevant than ever, says Pip Wilkins of the British Franchise Association

Price point: How much should you charge a franchisee?

The Franchise Show February 14 – 15 ExCeL London, London E16 1XL The British & International Franchise Exhibition March 14 – 15 Olympia, Hammersmith Rd, London W14 8UX British Franchise Exhibition June 20 -21 Manchester Central, Windmill Street, Manchester M2 3GX A full event listing is available on our website: elitebusinessmagazine.co.uk/ events

One to watch: YogaBellies

The woman behind the fast-growing female yoga franchise tells us her story, from downward-facing dog to Dragons’ Den

(H)Contents, News, Events.indd 2

01/10/2013 03:10

FRANCHISE NEWS

Grabbing a slice for the stands may not be the most orthodox way of accompanying the beautiful game, but thanks to a partnership between the Football League and pizza franchise Papa John’s means it might become a much more common sight from here on out. Becoming the official pizza partner for the Championship, League 1 and League 2, it certainly seems Papa John’s is advancing up the field.

It’s not often the world of franchising gets to rub shoulders with celebrity, but kung fu fan Peter Andre has invested in UK franchise Kung Fu Schools. After attending the classes with his children for two years, the pop star was rather chuffed to be invited to invest in the business by founders Paul Hawkes and Alan Paterson and will also be helping to promote the business through social and traditional media.

International IT training firm New Horizons has announced it is bringing more stores to the UK, following a successful pilot with its first London franchise. Having built up over 300 outlets across 60 countries in its 30 year reign as the king of IT training companies, the enterprise is now looking to extend its reach to some of Blighty’s biggest cities, giving franchisees the chance to run their own training centre. There are few foods that the Elite Franchise team like quite as much as the Middle Eastern treat falafel. Which is why it’s music to our ears that Just Falafel are stepping up their plans to introduce 200 additional stores to the UK by appointing a franchise operations manager Leonardo Valetta to join franchise sales director David Taylor and

(H)Contents, News, Events.indd 3

Featureflash / Shutterstock.com

Rounding up the latest happenings in the world of franchising

operations manager Adrian Liddiment. Hopefully this will mean we’ll be munching some fine falafel a little bit closer to home in the near future. For an organisation like the British Franchise Association, standards and compliance are obviously a rather big deal. Which is why it’s such good news they’ve netted a right gem for head of compliance in Kelly BlackmoreLee, a master of law with experience as both a franchise and operations director for kitchen retailer Dream Doors and consultant franchise director with Shakeaway. Ready to pick up the reins from current head of quality standards and compliance Andrew Quail when he retires in April 2014, we’re sure Blackmore-Lee is all set to bring plenty to the role.

01/10/2013 03:11

ANALYSIS

WORDS: JOSH RUSSELL

Pip Wilkins, head of operations for the British Franchise Association (bfa)

3.5%

ranchising is currently undergoing something of a renaissance. Every year for the last twenty years the number of British brands going down The number of British the franchise route has increased, last year brands going down the leaping by 3.5%. During 2011, at the height franchise route grew by of the recession, the Office for National Statistics reported that the UK economy had this percent last year lost 180,000 jobs; however the net number of jobs created by franchising totalled 73,000. No matter which way you look at it, the franchise market is growing. Inevitably, one of the things that has had an influence on the number of people wanting to get into franchising is the recent economic climate. Facing uncertain employment conditions, many have plumped for investing in their own business opportunity over returning to the rat race. “We tend to find people that have been made redundant a few times and, if I’m honest, have had enough,” comments Pip Wilkins, head of operations at the British Franchise Association (bfa). Not only do these people tend to be flushed with redundancy pay to fund a potential venture but often a switch can help individuals find circumstances that better suit them. “The joy of franchising for people is that you can buy something that fits around your lifestyle,” she continues. “It’s an opportunity to do what you want to do every day.” Whilst many of these factors are something franchises and enterprises can hold in common, franchising offers something that the majority of start-ups can’t: security. “It’s a proven business model and the failure rates are much lower,” Wilkins says. She refers to figures indicating that approximately 80% of businesses will cease trading within ten years and nearly a third won’t make it past five. Conversely, just 10% of franchise

We talk to the British Franchise Association’s Pip Wilkins about why there’s never been a better time to get into franchising

owners exit within 10 years and this includes positive exits, such as those that have made a success of it and sold the franchise on. Largely, franchisees can have the increased confidence of purchasing a enterprise which has already been tried and tested. “It gives people an element of comfort when they’re buying into a franchise that they’re buying into a proven business model,” explains Wilkins. “Somebody has gone out and made all of the expensive mistakes so you don’t have to as a franchisee.” And this goes both ways. This model can be very attractive for franchisors in part because they can be sure their franchisees are investing more than just capital. “They’re not buying a job; they are buying a business,” Wilkins says. A franchisee is committing to much more than a store manager would be; as well as going through a rigorous selection process, they have a real stake in its success and stand to benefit far more from its growth than a staff manager. “It’s not about taking a salary,” she continues. “You have an investment that you can sell on at some stage as you build the business.” But there are also wider trends at play. Not only does it seem that people are realising franchising can be applicable to an increasing array of sectors but Wilkins feels there is an increasing appreciation among the public for franchise outlets. Research conducted by the bfa back in 2007 revealed that people would rather use a franchised business than a non-franchised business. “It’s about a local business person, so it’s keeping the money in the local community,” she says. “But they have the backup and support of a national organisation.” Ultimately, franchising is unarguably seeing increasing interest from all quarters. Indeed, at its height in 2011, growth in the franchise sector was tenfold that of GDP, showing franchising is bearing plenty of fruit for the UK economy. Essentially, as Wilkins concludes, “More and more people are realising that franchising is an option to go into business, where you’re in business for yourself but not by yourself.”

The time is ripe for franchising (H)The time is ripe.indd 1

01/10/2013 03:29

â&#x20AC;&#x153;The joy of franchising for people is that you can buy something that fits around your lifestyleâ&#x20AC;? (H)The time is ripe.indd 2

01/10/2013 03:14

COVER STORY

A breadwinning formula When it comes to franchising, Subway is certainly setting the gold standard

WORDS: JOSH RUSSELL

f you asked a UK citizen to name a franchise, it wouldn’t be long before they hit upon Subway. Arguably one of Britain’s most recognisable franchises, the growth of the global submarine sandwich chain has been absolutely phenomenal, especially as it arrived on our fair shores less than two decades ago. Having now reached the towering heights of being the world’s largest restaurant operator, it’s evident that the franchise model has worked incredibly well for Subway. The seed of Subway was first sown when founder Fred DeLuca was looking for a way to fund his studies in medicine; his friend Pete Buck suggested he started a sandwich shop and lent him $1,000 to help get the outlet off the ground. Originally launched in 1965 under the rather inauspicious name ‘Pete’s Super Submarines’, the store quickly scaled and added more outlets, eventually taking the name ‘Subway’ in 1968. And by 1974, DeLuca had begun to look to other expansion methods. As Trevor Haynes, Subway’s area development manager explains, “After Fred got to a small number of stores, he started to look to franchise and that was when it really took off.” However, it wasn’t until 1996 that the sandwich shop was finally brought to Blighty’s high streets by a pair of entrepreneurs already familiar with the franchise’s system. “They were franchisees in Canada,” says Haynes. “They’d been very successful there and they decided ‘we could try the UK, we’ll look at Brighton’.” Given the sub is such a uniquely American foodstuff, it’s not hard to see why there might have been some translation required for British audiences to get a handle on what the Subway experience is all about. “Initially people wanted things like butter or they thought ‘where’s the train station?’” laughs Haynes. But it didn’t take long for the public to fall in love with the humble hoagy. “It started to catch hold and really took off,” he says. “People loved the fact that you could choose so many different proteins and salad options.” With time, Subway began to gather steam. From its modest beginnings in Britain’s premier seaside city, the franchise has mustered an impressive 1,685 outlets across the UK and Ireland. Despite experiencing the same slowdown as most enterprises during the shaky economic climate from 2008 - 2010, the franchise has definitely shifted into a new gear in the last decade. “It’s been developing at a phenomenal pace, particularly since the mid-2000s,” Haynes says. “We’re seeing some fantastic results coming through this year – we’re topping out at about 150 - 160 new locations so it’s really positive.”

(H)A breadwinning formula.indd 1

01/10/2013 03:15

â&#x20AC;&#x153;People loved the fact that you could choose so many different proteins and salad optionsâ&#x20AC;?

(H)A breadwinning formula.indd 2

01/10/2013 03:15

COVER STORY

Explaining this expansion isn’t easy without first understanding just how flexible the Subway model has become. First of all, the company is moving beyond standard outlets and using the system’s versatility to spread the brand even further still. “We’re really focused on nontraditional stores. They could be stores in petrol filling courts, train stations or airports,” Haynes explains. The number of Subway has always been focused on delivering Subway outlets its products wherever and whenever its customers across the UK and are. “We’ve got locations in high streets near Ireland nightclubs – they will be, between 1am and 3am, absolutely rammed with people,” says Haynes. And outlets in places like the London exhibition space ExCeL mean that the brand has a reach that extends far beyond the high street. “As long as there are people around to be served, we can to get to them,” he adds. A lot of noise has been made about Subway’s position as a healthier fast-food alternative. “It can be a relatively healthy option,” comments Haynes. “There’s a little bit there for everyone; you can have just a ham salad sub or you can have something like chicken teriyaki with triple jalapeños.” And this is a market in which the franchise is committed to maximising; it is avidly working to support the government’s ‘Responsibility Pledges’ to remove all trans-fats from its menu, lower the sodium and calorie content of its meals and it already clearly displays all the nutritional content of its products. “We’re working really hard to ensure it can be as healthy as possible without jeopardising the integrity of the product or its taste profile,” Haynes goes on to say.

1,685

(H)A breadwinning formula.indd 3

“We’ve got locations in high streets near nightclubs – they will be, between 1am and 3am, absolutely rammed with people”

These factors have helped capture the consumers and franchisees obviously continue to follow suit. “People eat it all day long and even into the evening because it does have that ‘made for you as you want it, made to order’ aspect,” Haynes says. “That’s very appealing for franchisees.” And a relatively low franchise fee of £8,500, coupled with a straight-forward service model, just helps to sweeten the deal. However, franchisees obviously aren’t just left to their own devices after signing on the dotted line. Out of the gate, the franchisee is placed for 40 hours hands-on experience in a store to get a feel for the offering and given access to a range of e-learning courses. Once completed, their next destination is the UK and Ireland training centre based in Cambridge. “When they come into the classroom, it’s a very intensive two weeks teaching controls and the aspects of the business they need to be a success,” explains Haynes. “They’ll also do more in-store training to ensure they really understood all aspects of food handling and hygiene.” On top of this, once a franchisee has graduated from this training, they are given 70 hours of opening assistance from one of the organisation’s field consultants to ensure they have the support they need in getting their outlet trading. But Subway hasn’t just been a hit with its customers and franchisees. Over the course of the last two decades, the brand has won the top spot in US-based Entrepreneur Magazine’s Franchise 500 an astonishing 15 times. “It allows flexibility; that’s why we’ve been able to win such awards,” Haynes says. Because of this, the franchise is booming, now having more than 40,000 stores across 100 countries and achieving impressive growth in all manner of markets, including Eastern Europe, Russia, China and Brazil. Haynes concludes: “It’s open to lots of nationalities and lots of different cultures because of the simplicity that allows individuals to become really entrepreneurial.”

01/10/2013 03:15

Does lifelong income tick your box? Yes.

Find out how we can help you: http://pppl.at/ebm-oct FP AD PLACE.indd 1

straightforward living

01/10/2013 02:50

Are you still dreaming of owning your own photographic business? take that exciting step now! and take advantage of our

great winter offer! Receive ÂŁ1000 Cash back at your launch!

Jan@photographyforlittlepeople.com www.photographyforlittlepeople.com

Photography for little people FP.indd 1

01/10/2013 03:35

ADVICE

Fit for franchising?

WORDS: JOSH RUSSELL

Adapting your business plan into a working franchise concept needn’t be a struggle if you take into account a few key points

(H)Fit for franchising.indd 1

ranchising can be an excellent way to grow your business and achieve greater market penetration. But it’s not just a case of heading out to some trade shows, getting yourself listed on a few franchising databases and waiting for a tide of franchisees to sign on the dotted line. For new franchisees to stand a hope of replicating your success, converting your existing business plan to a workable franchise concept is absolutely vital. Off the bat, it’s worth establishing what is actually a franchiseable concept. One of the most fundamental things people miss is making sure they have some protected intellectual property (IP) at the core of the business. “There has to be a brand in place,” says Euan Fraser, managing consultant at franchise consultant AMO Consulting. “There’s often a problem with people not having registered their trademark; they’re still back in the Middle Ages of ‘I’ve got a company name therefore I’m protected’.” Given a significant part of the value of your business will lie in its IP, this isn’t something that you can afford to overlook. It may sound like an obvious point but, again, it can’t be overstated that your business needs to be turning a profit. “It’s not a case of ‘I want to gain market share, I want to make some money in the process: I’ll franchise’,” comments Suzie McCafferty, managing director of franchise consultant Platinum Wave. “The business has to be a profitable business model that can be rolled out in other areas.” However, a healthy bottom line today isn’t the only concern; the concept needs to have longevity to guarantee that it will remain profitable in the future, instead of just being a flash in the pan. She says, “A passing trend or fad is not going to work in franchising because generally we sign a franchise agreement for a minimum of five years.”

01/10/2013 03:16

5189 - Making Money advert 28-6-13_Layout 1 27/06/2013 17:20 Page 1

Turn over £704k a year with this B2B management franchise opportunity

Our offer to you: Invest in a start-up or an existing business Your own postcode-defined territory National customer contracts with leading companies Unique software package Comprehensive training and marketing support

bfa HSBC ‘Franchisor of the Year’ 2012 Entry-level investment from £40,000 (licence fee £30,000) Help available with purchase finance

Driver Hire is

People like you

Financial returns

• One of the UK’s leading specialist recruiters

• Franchisees from a wide range of backgrounds

• A proven franchise with a 30-year record of success

• No previous knowledge or experience required, but...

• Average full year franchise turnover of £704k in 2012/13 (double UK franchise sector average)

• Providing logistics staff to private and public sectors

• 15% of offices turn over £1m+ per annum

• Over 100 offices, supplying some 3,000 workers per day

• A passion for excellent customer service and the commitment and desire to build a successful, profitable franchised business

• 23% business growth in 2010/11

• 93% of existing franchisees would buy a Driver Hire franchise again!

• Net profit potential of over £100,000 per annum

• Low fixed costs and attractive re-sale values upon exit

To discover more about this fantastic business opportunity call now to book onto one of our regular Discovery Days or visit

www.driverhirefranchise.co.uk

01274 361073 WINNER - bfa ‘Franchisor of the Year’ winner 2006

FP AD PLACE.indd 1

franchise@driverhire.co.uk

✆ 01/10/2013 03:36

ADVICE

Euan Fraser, managing consultant at AMO Consulting

Suzie McCafferty, managing director of Platinum Wave

(H)Fit for franchising.indd 2

However, perhaps the most vital element is ensuring there is something unique about your offering, that will keep your franchisee engaged with your business for years to come, not just the minimum term. “It has to be something different,” says Fraser. “There has to be a hook to keep the franchisee tied in at the end of five years, not just go off to Spain for a year, spend some money living it up and come back and set up in competition.” These points help form an important first evaluation of the efficacy of your tested business model and begin the process of producing a rounded franchise concept. “It’s a matter of measuring the business against these criteria and seeing where the gaps are,” explains Fraser. “Because in all of them, there will be a gap, there will be something that’s missing and that needs to be plugged to start with.” But obviously, there’s more to work through than just the glaring holes in your concept. Something that will need real attention is how you communicate these elements to your franchisees because leaving an element of ambiguity only serves to undermine the huge amount of work one has put in to develop effective processes. “Many business owners have a lot of great information but it’s often stored on spreadsheets or in their mind,” whilst there is plenty of training that can be comments imparted as a part of a standard training “It’s about replicating McCafferty. “An process, not every industry is the same and operations manual is some will require firsthand experience in systems and procedures, crucial because it the field, whether that’s accountancy or using a brand’s knowhow, details everything optometry. McCafferty explains, “It’s that’s required for a important to look at which franchisee is the systems and marketing franchisee to run their right one for that particular franchise.” business from the One last point that needs some careful to build a genuine and minute they go to working through are the financial successful business in work in the morning projections upon which a franchisor bases to the minute they their offering. “These will be heavily the local community” finish up at night.” qualified because the success is dependent Suzie McCafferty Whilst certain on a franchisee’s abilities and the graft and things may seem effort the franchisee puts in,” comments obvious to an entrepreneur, expecting a Fraser. Because of this, it can be a legal area that might trip up the unwary. franchisee to automatically land on the same “The important thing is to disclose to the franchisee the basis of the processes and solutions as them is woefully figures. It is based on a specific store.” unrealistic. “There is a truism that if you don’t And it’s important to have ironed out or, at the very least, clearly teach a franchisee the right way to do identified any biasing factors which may have influenced the results of a something, they’ll do it wrong,” says Fraser. As pilot. One thing Fraser recommends is that the entrepreneur removes with any brand, having a high degree of themselves from the pilot as much as possible, allowing a more realistic consistency between outlets is essential and this picture of what can be achieved through the application of the system. “It cohesive approach can only realistically be should be an arms length pilot, taking somebody who doesn’t already expected if there is an in-depth plan in place. “If understand the business,” he says. we say the flooring must be wood and must be Essentially, when trying to make the switch to franchising, a little careful mahogany then it must be wood and it must be planning can pay dividends. The effectiveness of a franchise concept rests mahogany. It’s about detail.” upon the strength of its foundations. As McCafferty concludes: “It’s about Something that also needs to be considered is replicating systems and procedures, using a brand’s knowhow, systems the profile of your intended franchisees. Unique and marketing to build a genuine and successful business in the local requirements need to be taken into account; community.”

01/10/2013 03:16

ONE TO WATCH

Flexible friends Having attracted the interest of Dragon and leisure mogul Duncan Bannatyne, YogaBellies possesses all the facets of a successful franchise model

or YogaBellies founder Cheryl MacDonald, franchising has certainly proven a more than acceptable means of growth. A proud wife and mother, MacDonald launched her niche female yoga enterprise four years ago, and ultimately decided that going the franchise route made sense from both a brand-building and logistical point-of-view. Indeed, it is safe to say that if anyone was going to successfully operate a female yoga franchise, it would be MacDonald. It has, after all, been her life for the best part of a decade. “I have been practising yoga for about ten years now,” she explains. “I worked as a marketing manager at a business analysis firm but would teach yoga in the evenings.” It was only when she was made redundant whilst on maternity leave with her son, who is now 4, that a solid, and much-needed, business opportunity arose from MacDonald’s previously ‘out-of-hours’ profession. “I just started teaching yoga in my spare bedroom,” MacDonald says. “We then turned the living room into the studio – but it soon became too crazy so I had to get a proper studio.” Aside from the fact it has developed into a dedicated yoga franchise, YogaBellies distinguishes itself by adopting a woman-only policy, and offering classes geared towards various stages of the birth cycle, as well as to children. This naturally emanates from MacDonald’s own experiences of childbirth, and how she managed to tie it in her with her passion for yoga. “I have always loved everything to do with pregnancy, and have always preferred teaching women yoga,” she explains. “Women are much more receptive which means teaching them yoga is very different to teaching it to men. Our bodies are built differently, we have a natural flexibility and men have a stronger upper body.”

(H)One to watch.indd 1

“We then turned the living room into the studio – but it soon became too crazy so I had to get a proper studio”

As her yoga classes began to attract more interest, MacDonald decided the time was ripe to explore how to take it to a wider audience. Needless to say, franchising provided an attractive option. “I wanted to have control over the brand and the consistency over what my teachers were offering,” she says. “When I did my teacher training, there were over 50 of us on the course and only four of us are still teaching now. So I wanted to keep the group small and really get to know the teachers and actively work with them as they progress as teachers. The best way to do that seemed to be a franchise model.” To that end, it makes sense that MacDonald’s ideal franchisee is somebody built in a similar mould to her. “They must have a keen interest in yoga but I also need someone who is just your everyday normal woman – I don’t want to scare my clients with too much wild chanting,” she adds. “So we are

01/10/2013 03:17

ONE TO WATCH

“We are looking for mainstream people who embrace the principles of yoga but can also work with an ethical business mind” looking for mainstream people who embrace the principles of yoga but can also work with an ethical business mind.” MacDonald’s time as a business analyst stood her in fairly good stead from the outset, but she admits that YogaBellies has now reached a point in its development where a more experienced entrepreneurial mind is required. And at the time of going to press, MacDonald was in the process of putting the final touches to a deal with Duncan Bannatyne, whose offer of £50,000 investment – for a 35% stake in the business (falling to 20% upon recouping the money) – should help take the franchise to the next level. “It will help expand the brand into areas that we wouldn’t have known how to before, and give us that extra level of professionalism,” says MacDonald. “I really feel that I have battled with what I can do and I really need help from someone with more business experience.” You can’t help but admire MacDonald’s honesty. And given the demographic of her customer base, it is undoubtedly a quality that will continue to help YogaBellies in the future. On the contrary though, MacDonald says that laying things on the line is also one of the biggest challenges of franchising, especially when something as precious as your brand is involved. “People seem to think ‘I will do this and the business will grow’ but you see people trying to play about with your brand, you get people trying to do the wrong thing, who then think you’re being mean when you tell them they can’t do that.” This extends to the relationship with clients too, which can come with its own set of trials and tribulations. “It can be very difficult and emotional, especially when you are dealing with lots of women who have just had babies or are pregnant,” she says. MacDonald believes that franchising isn’t an ideal fit for everyone, especially those looking to make a quick buck. “I think there are much easier ways to make money,” she says. “I love what I do and so I don’t mind as much, but if you don’t love what you do, I wouldn’t go near it because it’s not easy.” Fortunately, the international appeal of yoga has worked wonders for YogaBellies, which currently boasts 87 franchises across seven countries. “The yoga community is global so if you become well known as a yoga teacher, people will seek you out,” MacDonald explains. “I haven’t done any international marketing – people have found me.” After all, what is franchising if it isn’t a way of marketing your brand far and wide, and at minimal cost? “Once you have established your model and it is working, it is just a matter of finding the right people to roll that out for you,” MacDonald says. “If you are providing the right materials for your franchisees, then they are rolling it out in the local area and growing the brand for you. It becomes organic.”

(H)One to watch.indd 2

01/10/2013 03:17

SPONSORED FEATURE

One well-heeled man left a message on our answering machine to say his wife was bringing in a ball gown the next day so ‘please leave space on your machine’ for her. They expect a very fast service and we rarely disappoint. A regular moved out of the area but saves up his repairs until he comes back to visit friends – travelling over 160 miles for our quality of service. Grateful customers send flowers, wedding cake, thank you notes and gifts. Richard McConnell being awarded Franchisee of the Year at the ZipYard Conference on Saturday 21st September 2013 Edwina Mitchell (Training and Support Director); Richard McConnell; Nigel Toplis (Managing Director)

Outstanding customer service means that we have to be prepared to do whatever it takes. Last year a groom and his entire male entourage turned up the day before the wedding in a panic because they had only just discovered their suits were ill fitting. We stayed open through the night to finish the work and to get the party to the church on time and looking their best.

The Future

“We stayed open through the night to finish the work and to get the party to the church on time and looking their best”

Managing customer expectations isn’t easy and it has been a big challenge for us to be able to turn round work quickly as the volume increases. Recently we dealt with 90 paying customers in one day which is ten an hour! We already open seven days a week and are looking to employ another seamstress to focus full time on express work and have installed a second till to cope with the queues that had begun to form outside the door in busy periods. We are looking at ways to extend the range of services we offer including a paid for delivery and collection service which will appeal to our busier user clientele. At the moment I manage ZipYard with the help of one other but I will be recruiting additional customer facing staff to free me up to do more marketing and work on plans to open another ZipYard in the North West.

Customer stories

“To Danuska with eternal thanks. You saved my day. It means so much more than words could ever say.” We frequently see brides who have bought a dress from the internet. On one occasion a woman came in to the centre in tears with a dress that fitted terribly – by the time we had finished she was parading up and down with a big smile on her face. Another customer spent over £400 altering her wardrobe after a successful diet, and an elderly lady brought in all of her clothes to be taken in all bundled into storage boxes and carried up the high street to us. Nowadays very few people have the time or skill to mend their own clothes – and a lot of our work involves repairs - but even I was surprised when one of our regular customers brought in a pair of her son’s Y-fronts for us to fix a tear! For many of our customers we have become their personal tailors.

Zip Yard.indd 2

01/10/2013 03:37

Ableworld

Franchise Opportunity Ableworld, one of the UK’s leading mobility and home care retailers, is looking to award a limited number of franchises for its successful retail and stairlift businesses. According to government statistics, in 10 years time over 25 per cent of people will be aged over 65 and the figures for those over 80 and 90 are even more striking. Ableworld’s products and services are designed to capitalise on this growing market and you can capitalise too, as an Ableworld franchisee.

Franchisees will get: • Two integrated businesses for one price • The opportunity of earning up to £95,000 p.a. by Year 3 • Use of the Ableworld™ brand in an exclusive territory • A first class training and support programme

For more information call

01270 627 185 or visit

Franchisees will need:

www.ableworldfranchise.co.uk

• Drive, energy and enthusiasm • A customer service mentality • A passion for helping people • The desire to want to run their own business in a growing market

Low cost franchise opportunities We pride ourselves by offering our management franchise opportunities to only the most appropriate business minded individuals that are dedicated in offering clients the ultimate service...

We offer affordable vehicle leasing broker and estate agency franchises with no up front fee or minimum term contract

£99 + VAT per month 0330 022 9033 www.themovegroup.co.uk

HP Ad Place LHP.indd 1

info@themovegroup.co.uk

30/09/2013 22:21

Following the decision to franchise your business, one of the first things to set in stone is how much you are going to charge the people who have thrown their hat in the ring as potential franchisees. Needless to say, there are a number of factors to consider when it comes to pricing your franchise, and these will vary depending on the nature of oneâ&#x20AC;&#x2122;s enterprise. However, there are some simple steps that can be taken to make the process of price-setting all the more straightforward, and ensure that both parties are left satisfied, at least from a financial perspective

(H)How to price your franchise.indd 1

WORDS: ADAM PESCOD

how to price your franchise

01/10/2013 03:19

Sandra Venables, franchise consultant at Green Frog Consultancy Pip Wilkins, head of operations for the British Franchise Association (bfa)

Break it all down

It is not beyond the realms of possibility that a franchisee will query the price you are quoting, so it pays to put yourself in a position where you can lay out exactly what they are paying for. “A potential franchisee should never be afraid to say to a franchisor ‘Please break it down - what do I get for my money?’” says Pip Wilkins, head of operations for the British Franchise Association (bfa). “And a franchisor should be able to say ‘£5,000 of that is us recouping advertising costs, there is £5,000 attached to the training of you for your two-week course to get you up and running, this is for the launch marketing, this is for stock, materials, equipment, uniforms – that sort of stuff.’” Sandra Venables, franchise consultant at Green Frog Consultancy, adds: “You should clearly be able to demonstrate what the upfront fee has been used for and you should be able to provide an itemised breakdown of the franchise package including the cost of the licence.”

Bill Pegram, marketing director of The Franchising Centre

Offer a fair rate of return

All said and done, a franchisor and franchisee want to be safe in the knowledge that their partnership will deliver them both a healthy profit. Nevertheless, as far as setting the initial fee is concerned, the onus is on the franchisor to give the franchisee some peace of mind. “An ethical franchisor shouldn’t make money out of the initial franchise fee – it very much is there to cover the set-up for a franchisee,” says Wilkins. Meanwhile, the on-going fee should also benefit each side equally. “The fees have got to allow both parties to be able to make a profit,” says Bill Pegram, marketing director for franchise consultancy The Franchising Centre. “If the fees aren’t high enough and the franchisee makes all the profit, then the franchisor isn’t going to have the resources to train and support them properly. If it is too skewed the other way and the franchisor makes all the profit, then the franchisees are going to fail.”

Talk to the experts

There are a number of agencies on hand who can not only assess whether your business is ripe for franchising, but equally how much is could reasonably cost to franchise. Working out these costs will essentially make life a lot easier when it comes to setting a price. “From a franchisor’s perspective, one of the key things is to make sure they take proper accredited advice,” explains Wilkins. “We have a full list of franchise consultants that are people who would sit down with a franchise business and work out what their costs should be.” And Pegram says that taking on such advice can spot any glaring errors in the first instance. “Our first task is to make sure that the proposed franchise is going to work for the franchisor and the franchisees,” he says, “If we do that financial model and it doesn’t work, then it is best everybody knows before we go any further.”

“A potential franchisee should never be afraid to say to a franchisor ‘Please break it down - what do I get for my money?’” Pip Wilkins

Work out the best way to charge

Assuming that the initial franchise fee merely serves to cover the franchisor’s own costs, any profit made from the franchise agreement will arise from the on-going fees charged to the franchisee. The most popular model in this regard sees the franchisor collecting a percentage of the franchisee’s turnover on a regular basis, but there are other two other options available: product mark-up and flat fees. The franchisor should therefore be in a position to work out which of the three models suits them best before moving forward. “If you manufacture tools and you then sell the tools to a franchisee for a mark-up, you make your money there,” explains Wilkins. “We would always be slightly more wary of a fixed fee business because you are paying regardless of whether you are making it. But in exceptional circumstances, cash-based businesses will be a fixed fee because otherwise the franchisee can pocket lots of money as opposed to declaring it through the business.”

(H)How to price your franchise.indd 2

Think ahead

If a franchisor adopts the ‘percentage of turnover’ pricing model – as is common – vouching for the possibility of their franchisees achieving sizeable profits should play a large part in their considerations, and not necessarily for selfish reasons. “You do actually come across instances where mature companies get franchisees that really start to make serious bucks,” says Pegram. “The franchisee starts to say ‘in the early days when I was paying 10%, my turnover was £100,000, but now I am turning over £1m and I am paying you £100,000. I can’t quite really see where the value is.” Equally, a franchisee won’t take kindly to the fee going up alongside their turnover. “Just saying ‘all the others seem to be charging about 10% so we’ll charge 10%’ isn’t a professional way of going about the exercise,” Pegram adds. “Once you have 20 franchisees on board, good luck going back to them and saying ‘next time we renew your agreement, we are going to be increasing your fees by 20%’. So you really need to get it right in the first place.”

01/10/2013 03:33

FRANCHISE FOCUS • Become the ‘Go To’ news site for your local community • Franchise fee of £9,995 (plus VAT) • Low monthly fee of £199 (plus VAT)

AboutMyArea AboutMyArea offers you a unique business opportunity: an interactive local AboutMyArea online website that keeps the local population up-to-date with all the latest news and events in their area. AboutMyArea is not a hard sell advertising business. Its success is based on engagement and careful, effective marketing. Call 0871 384 9936 www.aboutmyareafranchise.co.uk

• Established in 2005

Century 21 Century 21 is the world’s largest estate agency network, with over 7,100 offices and approximately 100,000 agents in 74 countries worldwide. We are looking for new offices to join the Century 21 family and bring this international and exceptional brand to new locations in the UK. Call 0870 21 11 399 opportunities@century21uk.com www.century21uk.com/franchise

• Assistance with launching your business • Induction and on-going development training • Tech support • Access to an extensive global network

• Start your own mobile app business for only £5,995 (+VAT) • Substantial income potential • Work from home Call 0800 865 4600 www.eazi-apps-business.co.uk

• No tech experience required

KARE PLUS Kare Plus is a leading provider of quality nursing and domiciliary care, supplying medical and non-medical personnel to the NHS, some of the UK’s largest private hospitals and nursing care groups, and those requiring care in their own home. We have new Service Level Agreements in place with the NHS, a portfolio of established National Contracts and full CQC accreditation. Join us and earn healthy profits by delivering valuable services to your local community. Call 0845 094 9288 info@kareplus.co.uk www.kareplus.co.uk

Franchise focus.indd 1

Eazi Apps Get involved in the fastest growth market in history offering iPhone, iPad, Android and mobile web apps without any technical or design experience. We give you a full turnkey package that includes in- house training, support, help desk, loads of marketing materials and a full sales and marketing plan. Be your own boss, work your own hours, when you like, where you like.

• Established brand recognised by health professionals • On-going support, including recruitment and customer development • Access to national contracts nationwide • Competitive franchise fee of £40,000

01/10/2013 03:41

“We took £450,000 last year. It’s the best decision we ever made!” Terry & Sharon Hack, YourPlumber Franchise Owners

Tap your business skills into plumbing

Because you don’t need to be a plumber to run a YourPlumber™ franchise

Our management franchise gives you the opportunity to run a plumbing business meeting ever increasing demand with the most professional and customer orientated service in the industry. And you won’t need an extensive background in plumbing to be successful. • Proven demand with a service people always need • Average customer spend of £230 a time • Simple to operate with the YourPlumber™ Service Process • First year revenues from £100,000-£200,000 • No previous plumbing experience required • Multiple revenue streams • Investment just £19,995+vat

For your FREE franchise guide please call us today or visit our website

01202 230070

Make plumbing your business t. 01202 230070 e. enquiries@yourplumberfranchise.com

www.yourplumberfranchise.com

FP AD PLACE.indd 1

30/09/2013 23:47

ADVERTISING FEATURE

Husband and wife take the plunge and tap into £350,000 a year With no background in plumbing, Stuart and Angela Randall decided to start their own plumbing franchise. Two years on and they haven’t looked back.

aving spent more than 30 years in the banking sector between them, husband and wife team Stuart and Angela Randall decided it was time to start enjoying the rewards of their hard work for themselves. Needless to say, starting their own plumbing franchise with YourPlumber has lived up to their expectations – and then some. Has just completed their second year, their turnover increased by some 61% on the first year – quite a remarkable achievement in the current climate. Stuart looks back on how their journey began. “As a business bank manager I was becoming frustrated with the corporate world and with changes being made that meant decisions and control were being taken out of my hands. “Our careers at the bank had given us a lot of the key skills we needed to run a business and we felt it was time to use them. We also knew though that we’d need support moving into a new industry which is why a franchise seemed perfect. “Once we’d decided on the franchise route, we just needed a viable industry and a proven partner with expertise. We found both with YourPlumber. We wanted something that was going to always be in demand and sustainable for our family and plumbing fitted the bill.” The current economic climate might have put many off going into self-employment, but it was not something that deterred these two. “Leaving the security of employment and a salary was daunting for us,” Stuart reflects. “Our biggest fear was that the phone wouldn’t ring and we wouldn’t have any customers. As it transpires, nothing could be further from the truth. We’ve been busy ever since day one and the business has just continued to grow.” So without plumbing backgrounds, how has the

Your Plumber Advertorial.indd 1

“We’ve been busy ever since day one and the business has just continued to grow.” couple been so successful in running a plumbing business? “The training and support we’ve received from head office has been fantastic,” says Angela. “If we ever need support all we need to do is pick up the phone, whether it’s for sales and marketing, IT, accounting or recruiting staff. Plus we can always call on the experience of other franchisees in the group who have been so helpful and supportive.” Stuart adds that hard work also had a part to play. “We’re only just about to take our first holiday for more than two years,” he says. “We knew a lot of hard work was going to be needed, and still will be. But it’s different when you actually see the rewards of your own hard work.”

The management nature of a YourPlumber franchise is something that appealed to Stuart and Angela right from the start. “Service standards at YourPlumber are exceptionally high, which is particularly unique in the plumbing sector,” says Angela. “One man bands just don’t have the resources to do everything that’s required in growing a business and customer service is usually the biggest casualty. We’re able to instil the same beliefs in our staff which is fast earning us an excellent reputation among customers in our area. What, then, does the future hold for this entrepreneurial couple? “We’ve got a good team and solid foundations after two years to keep growing our business,” says Angela. “Plus there are some exciting developments from head office that should open some new markets for us in the coming months.” Asked if there was anything they would change, Stuart replies: “I only wish we’d done it years ago! We could not be happier.” FOR MORE INFORMATION Call: 01202 230070 Email: enquiries@yourplumberfranchise.com Visit: www.yourplumberfranchise.com

30/09/2013 23:37

58685 Dublcheck A4 2pp:Layout 1

17/6/13

16:29

Page 1

We GUARANTEE: Turnover

�

Growth

�

Support

Franchising

Dublcheck franchise owners receiving their awards at Dublcheck 20th Anniversary Gala Dinner

CHE

20th

1993 ANNIVERSARY 2013

Dublcheck franchisees celebrate at their National Conference

20 YEARS SUCCESS OF SETTING PEOPLE UP IN BUSINESS

Len Donnelly franchise owner receiving his Las Vegas Award

93-2013

Find out how you can be a business builder with Dublcheck. Call us today or fill in the slip below for further information

0800 317236 www.dublcheck.co.uk

APPROVED FRANCHISE ASSOCIATION

The Dublcheck Head Office Support Team For fruther information please fill in your details below and post to:

Dublcheck House, Minerva Court, Minerva Avenue, Chester CH1 4QT Name:

Tel:

Address:

Email:

Franchising

I would prefer to contacted by: FP AD PLACE.indd 1

Post

Telephone

Email 01/10/2013 03:43

17/6/13

16:29

Page 2

OF SETTING PEOPLE CH BL E UP IN BUSINESS 20th

Franchising

20 YEARS SUCCESS DU

58685 Dublcheck A4 2pp:Layout 1

1993 ANNIVERSARY 2013

Franchise F hi owners say: JOANNE Previously Project manager at Bank of Scotland Starting turnover: £50k Current turnover £73k

“We found Dublcheck during our research into the franchise industry and immediately liked its concept of guaranteed turnover*, with Dublcheck finding your clients and guaranteeing the level of turnover you desire.” - Peter

BUILD YOUR BUSINESS THE EASY WAY

Previously Greengrocers Starting turnover: £12k Current turnover £77k

Previously MD of Colouroll Starting turnover: £48k Selling turnover £400k

“Facing redundancy in my 50’s was unsettling. A management franchise was ideal because it enabled me to utilize my previous management experience. I love the fact that the harder my team and I work the higher the rewards.” - Graham

LEN DONNELLY “A big thank you to the Dublcheck team, and o receive an award was brilliant” - Len

Carol Stewart-Gill and the Dublcheck Support Team

“Once I met the Dublcheck team I found the concept of commercial cleaning very appealing” - Joanne

PETER & PRU

GRAHAM

93-2013

Previously Retail Manager Purchased resale Current turnover £300k

NO NEED TO DO ANY SELLING... WE GET THE BUSINESS FOR YOU!

We Guarantee:

• Turnover • Profit • Growth Larry Bainbridge

Jolanta Lavrenova

Starting Turnover £62k Current Turnover £250k

Starting Turnover £14k Current Turnover £82k

Full training, support and low investment Invest from £9,950 to £190,950. Turnover from £14,000 to half a million per annum. With over 100 franchisees nationwide, and many more areas and opportunities available, you too could benefit from the proven Dublcheck system. Dublcheck’s unique franchise system is a proven way to build a successful business in a multi-billion pound cleaning industry. Carol Stewart-Gill, Founder and Chairman of Dublcheck

Further Details: 0800 317236 SONAL & MITESH Previously Quantity Surveyor Starting turnover: £14k Current turnover £118k

“Sonal and I can’t belive a year has past since we decided to join this wonderful franchise. We both wish we had done this years ago.” - Mitesh

email: franchise@dublcheck.co.uk web: www.dublcheck.co.uk

APPROVED FRANCHISE ASSOCIATION

ALL FIGURES CORRECT AT THE TIME OF GOING TO PRESS

FP AD PLACE.indd 1

Dublcheck, The 20th Fastest Growing Company in the UK - Official Source, Sunday Times 01/10/2013 03:43

Do you dream of being your own boss? Would you like to make a difference to other people?

Are you interested in building a solid business and being part of a successful franchise network? Ever thought of a management franchise in the Home Care industry? What we offer Long term opportunity in a growing market sector Attractive income potential Competitive franchise fee and monthly service fee Financially and personally rewarding business

We have A proven track record A reputation for excellence Highly skilled and dedicated support team

Franchise Fee ÂŁ29,500 + VAT Build your business with our proven system. We will be there to support you every step of the way. Call us today! 01903 266 392 www.caremarkfranchises.com email: franchise@caremark.co.uk

Caremark FP OCT.indd 1

30/09/2013 22:25